The worldwide total annual expenditure on information technology is nearing $2,000bn - yet many leading software projects fail. Last year, in the US alone, billions of dollars was spent on projects that were subsequently postponed or cancelled.
Furthermore, IT directors are faced with many challenges - they include:
- The relentless emergence of new technologies.
- The time-to-market for new IT applications is shortening.
- Many computer-users are becoming IT 'literate' so they now want to do more with IT themselves.
It is inevitable that when projects fail, or do not achieve the full, anticipated benefits, the IT director will be blamed. However, despite these problems, the relationship between business and IT is steadily improving.
The evolution of the IT director's role can be summarised as follows:
A transaction-based relationship:
In the past - and there are still plenty of examples around - the business and IT relationship was transaction-based. The business 'asked', and IT 'delivered' a solution.
Characteristics of this system were that the majority of investment was on the systems. New developments take years to happen; applications development drives technical architecture and the IT department has multiple interfaces with the business.
A partnership-based relationship:
Today, organisations are gradually moving towards a more partnership-based relationship. The IT director and his team are beginning to identify what the business needs and pinpoint the best source of supply.
By pursuing this type of relationship, it means that there is speedy development of capability. The IT director has single interfaces with the business through accountant management functions. The technology innovation group keeps abreast of new developments. Systems architecture and planning anticipates the IT infrastructure needed to support solutions, driven by account management and technology innovation. Technical services provide extensive support for the desktop. Solutions delivery and technical services are prime targets for outsourcing.
Integrated relationship:
This all sounds encouraging, but PA has been working with clients to create a further evolution in relationships - an integrated relationship.
Here, the IT department moves a step further and anticipates and supports the business needs, providing a flexible IT Infrastructure which the business can apply to satisfy its needs. It has long been recognised that what the business wants to do, the IT department often cannot provide because of a rigid, tight infrastructure.
For organisations to move their IT function to this integrated path - which, after all could resolve the age-old 'business versus IT' - the journey can be a long and arduous one. For most organisations, this would mean a complete transformation and a painful transition, but it could be an alternative approach to another arguably increasingly financially painful one - that of giving the whole problem of the IT function to someone else - by outsourcing it.
There are four points to bear in mind when an organisation sets out to move its IT business relationship from transition based to an integrated solution:
- The preference of users - 'the customers' - must be thoroughly understood
- Rather than offering the usual generic products, individually tailored customer solutions must be the norm
- People, processes and technology must be aligned to deliver customer solutions efficiently
- Value-adding relationships delight and retain customers.
So, given all of these considerations, the IT director must accept accountability for customer satisfaction; determine and agree business-relevant performance targets for IT; and structure the IT department, processes and jobs to meet customer requirements.
Furthermore, he or she must ensure the right people are recruited, trained, empowered and equipped.
